The Flight Centre Travel Group reported an underlying profit before tax (PBT) of AU$106 million for the first half of its financial year, driven by strong growth in business travel. Corporate total transaction value reached a record AU$5.9 billion, a 16.8% increase.
The underlying profit rose by AU$90 million, a 565% jump from the previous year. Underlying corporate PBT also increased by 53% to AU$93 million during the six months ending December 31, 2023. The company noted that its corporate business outperformed the broader corporate travel sector.
Corporate business accounted for 52% of the overall TTV, which grew by 15% to AU$11.3 billion. The company credited these record results to high customer retention rates and new account wins, even though the sector has only recovered to about 70% of pre-Covid levels.
According to Chris Galanty, global corporate CEO, Flight Centre Travel Group, the strong corporate growth in Europe was led by FCM Travel in the UK with a 17% increase and Germany with a 25% rise. Steve Norris, managing director, EMEA, highlighted a 175% increase in the Netherlands.
Airfare price deflation impacted overall TTV growth, with average international fares dropping by 13% in Australia and 7% globally in the first half of the year. The company mentioned that TP Connects is crucial in providing access to airfares not available through traditional GDSs.
The roll-out of the Melon platform to SME customers of the Corporate Traveller division is on track for completion by the end of June. FCM Meetings & Events has been relaunched in various countries, showing strong recovery as businesses return to face-to-face interactions.
Future plans include the continuation of the Productive Operations initiative, large customer wins in the third quarter of 2024, and successful migration of all customers to the FCM Platform by the end of June. New accounts with projected annual spends of AU$1.3 billion were secured by the end of January.
